1989 (11) TMI 304 - HC - VAT and Sales Tax

Summary

Issues:
Validity of composition order and refund of amount collected.

Analysis:
The petitioner, a dealer, issued a cash bill and way-bill for 50 drums of ground-nut oil to be transported to a buyer. However, upon inspection, it was found that the lorry contained 40 empty drums, leading to the imposition of tax by the Check-post Officer. Subsequently, a composition order was passed based on the dealer's admission of irregularities in issuing spurious sale bills. In the assessment proceedings, the disputed turnover was initially included but later deleted after appeal. The petitioner challenged the composition order, arguing that since no tax was leviable, no penalty or composition should have been imposed. The court noted that the composition amount was collected due to the issuance of spurious bills, not for tax evasion, and upheld the composition order despite the subsequent assessment deleting the turnover.

In a separate argument, the petitioner contended that the composition should fall under clause (b) of section 32, limiting the composition amount to Rs. 1,000. The court agreed that the offense of issuing spurious bills did not involve tax evasion, placing it under clause (b) rather than clause (a) which pertains to tax-related offenses. Therefore, the composition amount should not exceed Rs. 1,000 as per the relevant provision. Consequently, the court allowed the writ petition in part, directing the state to refund the excess amount collected as composition, retaining only Rs. 1,000. No costs were awarded in the matter.

Overall, the judgment clarified the distinction between tax-related offenses and other offenses under the Andhra Pradesh General Sales Tax Act, determining the appropriate composition amount based on the nature of the offense committed by the dealer.